May 22, 2001
Narco News 2001
Banking" for Montesinos Family
for U.S. Favored Drug Traffickers
Selective White Collar Drug War
Special to The
Narco News Bulletin
investigation by the daily La Republica
of Peru revealed that among the clients of Citibank's controversial
"Private Banking" program was found the wife and two
daughters of Peruvian strongman-turned-fugitive Vladimiro Montesinos.
As recently as 1998, Citibank is found
on the Montesinos clan's money-laundering route of more than
$18 million U.S. dollars, according to La Republica.
That year, Maria Trinidad Becerra Ramirez,
wife of Montesinos, and their two daughters, Samantha and Silvana
Montesinos Torres, ordered a complex routing of $18,643,276 dollars
through the following banks: Luxembourg Societe Anonyme; Midland
Bank Public Lmt.; The Royal Bank of Scottland-U.K; Schweizerische
Volks Bank Zurich; Bank of America National Trust & Savings
Association; Popular Bank of Florida (today, BAC Florida Bank,
branch in Buffalo N.Y); Comerica Bank USA; Unicredito (Italy);
Royal Bank of Canada; Midstate Bank & Trust Co (Washington);
Union National Bank & Trust Co.; Banco Paribas (France);
Weston Compagnie de Finance Et D'investissement(Suisse); and
Citibank Private Bank.
Citibank Private Bank conducts Private
Banking for wealthy clients. As SUNY Binghamton professor James
Petras, a global expert on money laundering, explained in La
Jornada of Mexico City last week (and published
in English on The Narco News Bulletin):
is a sector of a bank which caters to extremely wealthy clients
($1 million deposits and up). The big banks charge customers
a fee for managing their assets and for providing the specialized
services of the private banks. Private Bank services go beyond
the routine banking services and include investment guidance,
estate planning, tax assistance, off-shore accounts, and complicated
schemes designed to secure the confidentiality of financial transactions.
The attractiveness of the "Private Banks" (PB) for
money laundering is that they sell secrecy to the dirty money
certainly fits the profile of an "extremely
wealthy client" who needed secrecy. But by 1998 it was well-known
even to casual observers of Peru politics that Montesinos, an
advisor to then-president Alberto Fujimori who controlled the
feared state security apparatus, had frequently and publicly
been accused of involvement in embezzlement, corrupt activities,
narco-trafficking and grave acts of torture and violations of
Still, the appearance, specifically, of
Citibank Private Bank on this money-laundering trail suggests
that none of those accusations concerned Citibank, arguably the
most powerful bank on the planet.
In fact, prior to that 1998 adventure
in laundering $18 million dollars by the Montesinos family, Citibank
had instructed its bankers to keep a special vigilance over Latin
American political leaders, reports Money
"In September 1997,
in the aftermath of the scandal over how it handled the stolen
fortune of Raul Salinas de Gortari, brother of the former Mexican
president, Citibank adopted a written policy that established
"special criteria for approval of accounts for public figures."
It requires various levels of approval, reporting and the maintenance
of special records, including "Opening Diary Notes."
The La Republica investigation, published last November, revealed that Citbank
International's offices in Great Britain held $322,720 - nearly
a third of a million dollars - for a key Montesinos ally in the
Peruvian military: General Luis Delgado de La Paz. And that this
deposit, too, was made after the new "special criteria"
was enacted by Citibank for accounts of public figures:
"Sources confrm that
in Latino bank there were documents that confirmed those deposits,
made in 1998
Delgado de La Paz is the title holder of two
accounts, one in Citibank International, in London, for $322,720
dollars, and another in Credit Suisse, for $188,200 dollars."
De La Paz had been in the news in 1998
- the same year he made the deposit - in Peru after Montesinos
promoted him to the logistical command of the Peruvian military.
In mid-2000, due to the reluctance of
the Fujimori regime in Peru to back the $1.3 million Plan Colombia
military intervention in neighboring Colombia, U.S. officials
turned against the dictator they had helped to install, had favored
and protected for eight years prior. It was Peru correspondent Peter Gorman who first suggested
in the January 1, 2001 edition of The Narco News Bulletin, that the downfall of Fujimori and his enforcer
Montesinos was a "bloodless coup" engineered by Washington
and Langley not because of their drug trafficking activities
or gross human rights violations, but because they would not
go along with the Plan Colombia program.
A secret videotape transcribed and made
public on May 14th of this year by La Republica in the
Peru capital of Lima, and translated to English by Narco News this
week, precisely confirmed that
rift between the Peruvian and U.S. officials.
Montesinos had made thousands of secret videotapes of meetings
he had with Peruvian leaders and U.S. officials, many of which
are in his control even while he hides as an international fugitive,
which explains the reluctance of officials in both countries
to capture him; last Fall, when Montesinos escaped to Panama,
he released a photograph of himself in front of some of those
videos, as a warning of what might become public upon his capture.
In the "Vladi-Video #1487,"
made on April 21, 1999, Montesinos explains to a Peru television
executive his government's difference with the Americans:
"The only alternative
that the Americans have in order to solve the problem of Colombia,
is the invasion... They are preparing half a million Marine infantry
troops in order to invade Colombia and they asked us for the
President to make declarations because they could not say it
When the infantry of the Marines does enter,
what are they going to make the FARC and the drug dealers do?
They are going to come to Perú. And if we don't close
the border now and adopt security measures, we will bring the
who lives by the videotape dies by the videotape, and it was precisely the astonishing public release
of one of Montesinos' videotapes by his political opponents (how
they got it remains a mystery) in which Montesinos bribes a member
of Peru's congressional opposition, that led to Montesinos' loss
of control. He fled the country and his former sponsor, President
Fujimori, named a special prosecutor, Jose Carlos Ugaz, to investigate
his former right hand man.
According to the daily Clarin of
Argentina last November 5th, Jose Carlos Ugaz, in no time at
all, easily obtained evidence of the Montesinos money-laundering
trail. Facts that the vast global empire of Citibank, previously,
had no incentive to know about their Montesino family and friends
"The prosecutor said
that he will investigate not only the bank accounts in Switzerland,
but others that he also had, according to information obtained
by Clarin, in Atlantic Security Bank, Bank of New York, Republic
National Bank, Florida Bank, Midstate Bank & Trust Company,
Citibank Private Bank and the Central Counties bank, as well
as other banks in Panama, the Cayman Islands, Trinidad and Tobago.
"In the majority
of the mentioned banks, the accounts would be in the name of
Montesinos' wife, Trinidad Becerra Ramirez, and it is suspected
that they are also in the name of one of the sisters of the ex-advisor,
Karelia Montesinos Torres, married with the ex-strategic chief
of the Second Military Region, General Luis Cubas Portal."
Again, Citibank appears through its Private
from here we begin to arrive at the
unspoken public policy scandal to come over the behavior of Citibank
and other financial giants in the United States when it comes
to laundering the ill-gotten gains of Latin American dictators
and businessmen: Citibank's declarations of "special criteria"
and vigilance over public figures is only selectively applied
according to the current political positions of the U.S. government.
As long as Montesinos was an "intelligence
asset" of the CIA and U.S. government, Citibank and the
other U.S. banks knew they could safely look the other way without
provoking the attention of the authorities who, supposedly, prosecute
illicit money laundering.
It was only when Montesinos fell out of
favor with U.S. authorities that Citibank made any move against
his vast money-laundering operation. U.S. law enforcers moved
on a key Montesinos "bagman" only weeks after the November
2000 downfall of Fujimori, and just a few months after Montesinos
went underground, both having lost the support of the United
The March 2001 issue of Money
Laundering Alert included a sub-section titled:
Montesinos "bagman" a Citibank
And it reported:
Now, another of its (Citibank's)
foreign "public figure" customers, Victor Venero Garrido,
a Peruvian military official, whom the FBI says was a "most
trusted bag/straw man" for Montesinos, has had his Citibank
accounts and large cashiers checks seized by the U.S. on money
laundering and other grounds. On January 26, the FBI arrested
him in Miami as a foreign fugitive as he tried to withdraw funds
Money Laundering Alert called Montesinos' operation a "Far-reaching
laundering scheme," noting that:
Montesinos allegedly moved
$75 million between 1998 and 2000 through other accounts to diverse
businesses in several countries. Fujimori fled Peru in December
shortly after Montesinos escaped. The president took refuge in
Japan, his ancestral home, which refuses to honor Peru's extradition
request because of Fujimori's previously undisclosed dual nationality.
The Justice Department
and FBI have initiated a bi-coastal effort to find and seize
the fortune Venero allegedly deposited in California and Florida
banks. Federal court orders freezing his accounts have been obtained
in both states on laundering and other grounds (Title 18, USC
Sec. 981(b)(4)). "We think there are more assets to be found,"
said Judy Orihuela, an FBI spokeswoman.
The FBI says Venero recently
deposited about $15 million at Citibank in Miami, and had four
Citibank cashiers checks and six from Hacienda Bank, of California,
when arrested. The FBI believes Venero had up to $1 million in
a Sanwa Bank account and $250,000 in Northern Trust, which advertises
itself as "The Private Bank."
The military pension fund
scheme, the U.S. says, involved kickbacks to Venero from Peruvian
banks where he had deposited millions in fund dollars. The FBI
says he stole over a hundred million dollars from the fund. Neither
he nor Montesinos has yet been charged with a U.S. crime.
And Money Laundering Alert concludes
that part of Montesinos' fortune comes from "Alleged drug
In Peru, the corruption
allegations against Fujimori and Montesinos go far beyond misappropriation
and shady business deals. They allegedly netted up to $45 million
from deals with, and payoffs from, Pablo Escobar, the late Colombian
drug lord, according to his brother, Roberto, who is now in a
Colombian prison. Montesinos allegedly had agreed to give safe
passage to Escobar's drug-laden planes at Peru airstrips.
And yet, it was not until after Montesinos'
fall from grace with U.S. authorities that Citibank moved against
his money-laundering operation, by alerting federal authorities
to the accounts of the "bagman," Venero.
Reuters reported this Spring that Venero
opened his Citibank account in 1998, but that Citibank claims
that "nothing seemed out of place" with his deposits
of $15 million U.S. dollars in the Miami branch:
NEW YORK, March 28 (Reuters)
- A high-ranking Peruvian official, Victor Alberto Venero-Garrido,
opened a bank account at Citibank in Miami in 1998, and moved
about $15 million through it until January this year, when the
U.S. Federal Bureau of Investigation arrested him.
As Latin Americans often
opened dollar-denominated bank accounts in the United States
to protect their savings and stocks from inflation in their home
countries, nothing seemed out of place -- at first.
But Citibank, a unit of
financial services firm Citigroup Inc. and other banks with Venero-Garrido's
money gradually noticed unusual activity in the accounts and
alerted the authorities, law enforcement officials said.
the "special criteria" boasted
about by Citibank officials (including by former Citicorp CEO
John Reed in his 1999 testimony before a Congressional committee
investigating drug money laundering), "nothing seemed out
of place" with Venero's accounts to Citibank officials,
said law enforcers.
Yet, it was a matter of public information
that Venero controlled Peru's police and military pension funds,
and that he was closely allied with Montesinos.
Reuters adds that the Venero millions,
before they reached Citibank, were "surreptitiously removed
from Peru through banks in the Cayman Islands. He used wire transfers
to deposit funds in to the account, opened accounts under corporate
names and even used relatives to deposit money from Peru, according
to sources close to the investigation
Ultimately, the funds
wound up at a number of U.S. banks and brokerages," including,
"Citibank, where Venero-Garrido had a personal banker although
he was not a private bank client."
Earlier this year, the Miami Herald
reported that there was, indeed, plenty "out of place"
with Venero's activities, including within Florida, and yet none
of this seemed "out of place" to Citibank officials
- at least while Montesinos still enjoyed the banking of the
The Herald reports on Venero:
His South Florida homes
were bought in cash for a combined $666,400 in 1995, Miami-Dade
County records show.
The luxury Surfside condo
in Champlain Towers East, 8855 Collins Ave., was purchased in
his name. The house, a two-story, 2,500-square-foot home in the
Three Lakes development, 13365 SW 151st Ter., was deeded to his
wife, Luz Elena Nazar Loayza.
In a 1997 deal, the condo
was transferred to Vialve Company Ltd., a corporation registered
in the Cayman Islands. Records list Venero as the company director.
A year later, the house was transferred to the same company.
No money was involved in either transaction, real estate documents
On Dec. 4, 2000, the properties
were transferred again, this time to a company in the British
Virgin Islands called Coral Row Group, according to real estate
records. The company's local address: Mail Boxes Etc. on Southwest
Again, we see the selectivity of Citibank's
"special criteria" regarding public officials, enacted
in 1997 after the scandal erupted around the bank's laundering
of illicit funds for the family of former Mexican President Carlos
Salinas de Gortari.
Citibank began doing business with Venero
in 1998, after the "special criteria" for "public
figures" was put into force. The public official, Venero,
head of the state pension funds in Peru, had already bought a
$666,400 South Florida home "in cash," but "nothing
seemed out of place" to Citibank. He transferred his condo
to a Cayman Islands company that listed him as the director,
and later a house to the same; "no money was transacted,"
but, to Citibank, "nothing seemed out of place."
All this occurred before Citibank gave
Venero a personal banker (who, despite the oft-stated duty to
"know your client" apparently was unconcerned with
the source of his funds or the nature of his Florida property
ownership) and accepted $15 million dollars in deposits from
this government functionary from Peru.
The Miami Herald also reports that,
while a Citibank client with his own personal banker there, Venero
had a scrape with the law last Summer:
Venero, who was in the
United States on a tourist visa, didn't live in either home for
very long, neighbors said.
In fact, on a July 2000
visit to the United States, he stayed in Room 1076 at the Fontainebleau
Hotel, a Miami Beach Police report said. Officers showed up at
his room after someone reported screams. They found Venero's
girlfriend, Lourdes Muñoz, on the bed with a bloody nose.
Venero, who told police
Muñoz's face had accidentally struck his elbow while his
arms were raised, was hauled off to jail, along with $2,500 in
his Versace billfold. The charges were dropped.
A month later, the Montesinos video scandal
hit, he soon went underground, Fujimori soon fled to Japan, and
only after that did U.S. officials take action against Venero,
arresting him on January 26, 2001.
Venero must have intuited that the jig
was up: In December 2000, as Fujimori fled, according to the
Herald, he disappeared. That's when his Citibanker said
he lost contact with him. And Venero changed his address to a
"Mail Boxes, Etc." storefront mailbox in the British
Federal officials told the Herald
they began surveillance upon Venero's house in South Florida
"last year." They were not specific on the date, but
the first identification of Venero by a neighbor came in December.
Certainly, there had been no All Points Bulletin on Venero last
July when he was apprehended by local police after bloodying
his girlfriend's nose in a hotel room. Although an immigrant
on a tourist visa, he was allowed to walk free: In Miami, a virtual
bee hive of federal immigration officials.
But Montesinos and Fujimori were still
in power then, and their bagmen and money-launderers could still
count with immunity and impunity from U.S. authorities. It was
in the following months that they fell. Then, and only then,
did the "special criteria" kick in.
When it comes to Citibank - and other
U.S. banks - this is really about an unwritten "very special
criteria": Individuals who are "intelligence assets"
of the U.S. government may launder millions. And the banks will
compete for their business.
It is only when foreign politicians fall
out of favor with U.S. authorities that the law suddenly applies.
Like the larger drug war for which it
stands, government and business "controls" on money
laundering represent a hypocritical policy. That policy has nothing
to do with combatting drugs, but, rather with persecuting the
powerless while protecting the powerful.
And when it comes to politically favored
strongmen across our América like Vladimiro Montesinos,
his bagmen, and his family, as long as they obey the larger official
agendas of globalization, repression against social movements
for true democracy and justice, and support for Plan Colombia
and similar interventions, U.S. officials have their own "special
criteria." They look the other way.
Holding a Mirror
Up to the Drug Warriors